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The Lexpert CCCA Corporate Counsel Directory & Yearbook is a joint endeavour of the Canadian Corporate Counsel Association and Lexpert. It provides the most extensive listing of corporate counsel in Canada.

Bank fights disclosure of commercial contract

The Toronto-Dominion Bank is asking the Ontario Court of Appeal to weigh in on whether commercial contracts with public institutions or government ministries can normally be disclosed through freedom of information requests.

Catherine Beagan Flood says a presumption that commercial agreements between private entities and public institutions or government ministries are subject to disclosure ‘comes as a surprise to vendors.’

The bank served notice on March 31 seeking leave to appeal a decision last month of the Divisional Court, which upheld an order for an “affinity agreement” with Ryerson University to be made public under the provisions of the Freedom of Information and Protection of Privacy Act.

If leave is granted, it will be the first time the sections of the statute that balance the public’s right to know about financial agreements entered into by government and a company’s desire to keep certain information private will be squarely before the Court of Appeal.

The Divisional Court ruling, issued on March 17, concluded that the agreement, which permits TD to promote financial services products to the Ryerson community in exchange for a fee to the university, does not fall under any of the exemptions to disclosure in the provincial statute.

“The adjudicator’s approach is consistent with the purpose of the Act, namely that information should be available to the public and exemptions should be limited and specific,” wrote Justice Katherine Swinton, with justices Alison Harvison Young and Julie Thorburn concurring.

The Divisional Court decision is the latest step in a proceeding that began in 2014 when Ryerson received a freedom of information request for the affinity agreement.

The university agreed to disclose it, except for Schedule B.

The bank appealed that decision to the Information and Privacy Commissioner of Ontario.

An IPC adjudicator ruled last year that under provincial freedom of information provisions, all of the agreement should be disclosed.

The agreement between TD and Ryerson contained financial information, but it did not meet the disclosure exceptions in s. 17 of FIPPA, concluded Gillian Shaw.

She also rejected the bank’s argument that a new “innovative contractual arrangement” exception should be created.

The adjudicator’s findings and the judicial review by the Divisional Court reached similar conclusions to that of a number of previous cases in Ontario on this issue, says David Goodis, a lawyer and an assistant commissioner of the IPC.

Without commenting on the specifics of the TD case, he suggests there are good policy reasons for these conclusions.

“In the big picture, there is a very strong public interest in being able to scrutinize agreements by governments, particularly details of spending by government to ensure they are getting value for money,” says Goodis.

TD was represented by Christine Lonsdale, a partner in the litigation group at McCarthy Tétrault LLP in Toronto.

She referred questions to the communications department at the bank.

“While we recognize the public’s interest in activities undertaken by Ryerson, significant time and effort have gone into honing the unique and proprietary terms and conditions of the agreement.

Ryerson was represented by three lawyers at the Divisional Court hearing, including the university’s general counsel, Julia Shin Doi.

“We have no comment,” she replied when contacted by Law Times.

The presumption that these commercial agreements are subject to disclosure in Ontario “comes as a surprise to vendors,” says Catherine Beagan Flood, a litigation partner at Blake Cassels and Graydon LLP.

“That is not their experience in other jurisdictions.

“There is a long-standing controversy over whether this is the correct interpretation of third-party rights,” suggests Beagan Flood, who is not involved in the TD case but has acted in several freedom of information/privacy legislation cases.

As well, the analysis conducted under the Ontario statute is different than the way the federal access to information provisions are interpreted, such as in the Supreme Court’s 2012 decision in Merck Frosst v. Canada (Health), where the court stressed a need for a “careful balance,” says Beagan Flood, who acted for Merck Frosst in the case.

She also suggests there is a public benefit in being more protective of the right of a company to keep information private that it believes would put it at a competitive disadvantage if disclosed.

“You are creating a disincentive from offering government your best price or terms.

“It will now be known to your competitors,” says Beagan Flood.

The public interest exception in FIPPA, which can override exemptions, is a better way to deal with this balancing of rights, such as in cases where there may be concerns raised about a specific commercial agreement, she says.

For his part, Goodis believes it may be helpful for the Court of Appeal to provide guidance in this area.

At the same time, he stresses that the procurement processes of governments and public institutions should be transparent.

“If you don’t like it, you don’t have to bid,” says the IPC assistant commissioner.

In the TD case, the bank’s central argument was that the “structure” of its affinity agreement is “innovative” and has not been replicated by its competitors. The bank compared it to a unique recipe or computer program.

The argument was not accepted by the IPC adjudicator or the Divisional Court.

“Although the bank argues forcefully that the structure of the agreement is an informational asset that it supplied to the university, it has not identified with any precision what particular aspect of the contract’s ‘structure’ it seeks to protect.

“In any event, I am not persuaded that the agreement’s structure can be viewed as separate from its terms,” wrote Shaw, in finding the deal to be a negotiated agreement and not akin to a trade secret.

The federal government’s Bill C-69, the Impact Assessment Act, proposes to reform the federal environmental assessment regime and place more emphasis on early engagement with affected communities as a way of avoiding problems as the assessment process unfolds.

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